IDEAS home Printed from https://ideas.repec.org/a/spr/empeco/v27y2002i3p529-542.html
   My bibliography  Save this article

The Austrian current account deficit: Driven by twin deficits or by intertemporal expenditure allocation?

Author

Listed:
  • Sylvia Kaufmann

    (University of Vienna, Department of Economics, Hohenstaufengasse 9, A-1010 Vienna, and Oesterreichische Nationalbank, Economic Analysis Division, Otto Wagner Platz 3, 1090 Vienna)

  • Georg Winckler

    (University of Vienna, Department of Economics, Hohenstaufengasse 9, A-1010 Vienna)

  • Johann Scharler

    (University of California - Davis, Department of Economics, One Shields Ave., Davis, CA 95616-8578)

Abstract

The evidence presented in the paper rejects the twin deficit hypothesis for the Austrian current account balance during the last two decades. The results are based on an estimate of a vector error correction model including quarterly data for the current account balance and potentially relevant variables driving its dynamics. We compute the variance decomposition of the current account's forecast error and its generalized impulse responses to shocks in the innovations of the system. The results in favor of intertemporal expenditure reallocation cannot be reproduced within a second analysis including the current account and a measure of net output, however. The estimated implicit current account balance, interpreted as the discounted expected change in future net output, does not follow the actual behaviour of the current account.

Suggested Citation

  • Sylvia Kaufmann & Georg Winckler & Johann Scharler, 2002. "The Austrian current account deficit: Driven by twin deficits or by intertemporal expenditure allocation?," Empirical Economics, Springer, vol. 27(3), pages 529-542.
    • Handle: RePEc:spr:empeco:v:27:y:2002:i:3:p:529-542
    Note: received: June 1999/Final version received: March 2001
    as

    Download full text from publisher

    File URL: http://link.springer.de/link/service/journals/00181/papers/2027003/20270529.pdf
    Download Restriction: Access to the full text of the articles in this series is restricted
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    More about this item

    Keywords

    current account · Mundell-Fleming model · Ricardian equivalence · vector error correction and vector autoregression · variance decomposition · impulse response analysis;

    JEL classification:

    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:empeco:v:27:y:2002:i:3:p:529-542. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.